EURUSD has been in a steady decline after peaking at the 18-month high of 1.1275 on July 18, generating a series of lower highs and lower lows. Besides that, the pair has dived beneath its 200-day simple moving average (SMA), which is further deteriorating the technical outlook.
The momentum indicators currently suggest that the bearish forces are in control. Specifically, the RSI is hovering well below its 50-neutral threshold, while the stochastics are descending close to their 20-oversold mark.
Should the decline below the 200-day SMA extend, the recent support of 1.0765 could act as the first line of defense. A break beneath that region could open the door for fresh lows, where the May bottom of 1.0633 might curb further declines. Failing to halt there, the price may move lower to challenge the March bottom of 1.0515.
Alternatively, if the pair reverses back higher, the bulls could attack the recent resistance of 1.0944, which overlaps with the lower boundary of the Ichimoku cloud. Violating that territory, the price may face the February high of 1.1032. Should that hurdle also fail to provide resistance, the spotlight could turn to 1.1094, which held strong three times in April.
In brief, EURUSD seems to be stuck in a downtrend as the bulls continue to stay on the sidelines. For that bearish sentiment to alter, the pair needs to reclaim the 200-day SMA.
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